If an investor holds earns 10% on her investment in the first year and loses 10% the next year,she will have neither a gain nor a loss.

Question

Quizplus · Accepted Answer

If an investor earns 10% in the first year, they will have a gain on their investment. When they lose 10% the next year, they will not be back to the same starting point as their investment will have decreased. Therefore, they will have a loss overall.

If an Investor Holds Earns 10% on Her Investment in the First